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Scrutiny: No Scrutiny on Interest Rate Subsidy Schemes – Brings back pensions issue

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Ελεγκτικor: Χω ;ρΙς Ελεγχο τα σχΕδια επιδоτησης ε&pi ;ιτοκΙων – ΕπαναφΕρει το θΕμα των &sigma ;υντàξεων

By Alexia Kafetzis

Cases of simultaneous payment of salary and pension to current and former officials, the Audit Service finds in its special report for the General Accounting Office of the Republic, in which it recommends the “immediate termination of the payment of the pensions of current officials”, which is done, as it emphasizes, “in violation of the express provisions of the relevant laws, and that no illegal pension be paid for the month of January 2024 and thereafter”.

He notes that according to the relevant legislation their pension should be had been suspended for the period during which salary is/were paid to them.

In its special report for the year 2022, EY finds, among other things, “accounting policies/manipulations determined by the GA, which are inconsistent with the accounting principle of actual receipts and payments, on the basis of which the financial statements were prepared”, as well as “absence of a mechanism for regular reconciliation and/or reconciliation at the end of the year of the amounts of the Integrated Administrative and Financial Information System (FIMAS), with individual computerized systems and other sources of information, with the result that the completeness and correctness of the of affected receipts and payments”.

“It was not possible to confirm the correctness/completeness of certain amounts included in the financial statements,” it notes.

He also mentions that the legislations on the memorandum cuts were not applied to the salaries of the Judges who were hired after the passage of these legislations, until August 2021, while from the control he carried out in the Table “Loans with a government guarantee”, of the Fiscal Report for in the year 2022, he observed that “the statement of outstanding government-guaranteed loans as of December 31, 2022, sent to the GL by the Cyprus Asset Management Company (K.E.DI.P.E.S.), includes seven cases of loans, which are not included in the above Table, as there is a disagreement between K.E.DI.P.E.S. and GA whether the specific loans are guaranteed by the Republic”.

EY recommended that the GL request information from K.E.D.I.P.E.S. and in the event that there is still a disagreement, the General Court should consider the possibility of obtaining legal assistance from the Legal Service of the Republic for a final settlement of the matter.

Also, according to the dialogue, the EY finds that, ” no specific reference was made in the financial statements to the amounts received from third parties and paid to third parties and/or any balances in the General Government Account at the end of the financial year relating to third parties, as the recommendation of the International Accounting Standard followed for the preparation of the financial statements”.

It also states that from the control of the regularity of collections and payments, we found weaknesses in the internal control mechanisms and cases of non-compliance with instructions/circulars of the General Government regarding the documentation and control of collections and payments.

In addition, EY found that, in all cases, the provisions of the “Interest Subsidy Plan for New Business Loans” and the “Interest Subsidy Plan for New Mortgages” were not observed by the General Accounting Office and/or there was no control of the observance of all the provisions Loans”, which were implemented in the context of taking measures to support the economy to deal with the effects of the COVID-19 disease.

He adds that he identified “again cases where supporting documents, other than the Central Bank's credit note, are not attached to the collections of the General Bank, and/or which do not bear an indication of control, with the result that it cannot be documented whether the General Bank secured all the necessary information and conducted an audit to verify the correctness and completeness of the amount, at the essential time of collection”.

EY recommended that “for all amounts credited to revenue funds an audit is carried out, which is documented, regarding the correctness of the amount collected, whether it resulted from a calculation or in another way”, while recommending to the DG to consider the possibility of amending the Accounting and Financial Directives and/or issuing a relevant circular, in order to emphasize the need to check the correctness /completeness of the collection amount.

According to EY, from an overview of the deposit accounts and the revenue accounts of the General Directorate of Development (GDA), we found that no relevant control is carried out by the DG during the preparation and registration of corrections registrations, resulting in the double registration of receipts in GDA revenue funds. We recommended that the GA conducts the necessary checks during the preparation and registration of the correction slips.


Source: 24h.com.cy

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